HB681 Alabama 2012 Session

Summary

Primary Sponsor

Patricia Todd

Democrat

Session

Regular Session 2012

Title

Motor vehicles, title loan business, licensure and regulation, fees, fines, penalties, enforcement, Alabama Title Pledge Act

Summary

HB681 creates the Alabama Title Pledge Act to license and regulate title pledge lenders and their offices, set transaction rules and fees, and establish borrower protections and enforcement.

What This Bill Does

It would require licensure for title pledge lenders and their offices, with bond or deposit requirements, and empower the Banking Department to issue rules and collect fees. It would mandate a standardized title pledge transaction form, keep detailed records of pledges and pledged property for two years, and allow law enforcement access to records. It would govern borrower protections and lender duties, including redemption rights, possession and sale procedures if not redeemed, disclosure requirements, and a cap on service charges, along with extension rules and penalties for violations.

Who It Affects

• Title pledge lenders and their offices: must obtain and maintain licenses, post bonds or deposits, and follow licensing, recordkeeping, and enforcement rules.
• Pledgors/borrowers and their pledged property: have defined redemption rights, potential risk of possession and sale if not redeemed, and required disclosures and protections in the lending process.

Key Provisions

• Establishes the Alabama Title Pledge Act to license title pledge lenders and offices, with license fees and bonding/deposit requirements.
• Requires the Supervisor of the Bureau of Loans to create a Title Pledge Transaction Form capturing borrower and loan details (make/model/year, VIN/ID, pledgor information, amount financed, maturity, charges, APR).
• Mandates that lenders keep complete records of all pledged property and transactions for two years and provide records to law enforcement upon request.
• Imposes a service charge cap of up to 25 percent per month of the principal advanced; limits extensions with a 10 percent principal reduction rule and requires notices and written extensions.
• Defines redemption and possession rules: pledgor can redeem by paying amounts due; lender may take possession after maturity and sell pledged property, with the pledgor receiving 85 percent of sale proceeds after deductions; outlines holds and timelines for redemption after possession.
• Sets licensing process and fees: initial license fee ($600), annual renewal ($500), and bond/deposit options; fingerprints and background checks required; licensees may be suspended or revoked for violations.
• Enumerates penalties for violations: civil penalties up to $500 per violation, possible criminal penalties for certain offenses, and notification of local law enforcement for license actions; proceeds from forfeited bonds may support law enforcement budgets.
• Allows municipalities to enact compatible ordinances; effective date is a future date after governor approval; forbids deceptive advertising and requires compliance with stated rules.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Motor Vehicles